In order for a hotel to successfully price discriminate so that senior citizens are given a discount,the hotel must be able to
A) offset the economic loss from charging senior citizens a lower price by lowering the marginal cost of renting rooms to senior citizens.
B) lower its prices to younger customers too.
C) prevent senior citizens from reselling their rooms to younger customers.
D) shift its demand curve rightward.
E) determine if a senior citizen can pay a higher price.

Question

Quizplus · Accepted Answer

To successfully price discriminate by offering discounts to senior citizens, a hotel must ensure that these discounted rooms cannot be resold to non-senior citizens (younger customers) at a profit. This prevents arbitrage, where people could buy discounted rooms and sell them to others not eligible for the discount, undermining the hotel's pricing strategy.

In Order for a Hotel to Successfully Price Discriminate So